02498cam a22002657 4500001000700000003000500007005001700012008004100029100002900070245013200099260006600231490004200297500001900339520137800358530006101736538007201797538003601869690008401905700002901989700002002018710004202038830007702080856003802157856003702195w12685NBER20180319225259.0180319s2006 mau||||fs|||| 000 0 eng d1 aKleven, Henrik Jacobsen.14aThe Optimal Income Taxation of Couplesh[electronic resource] /cHenrik Jacobsen Kleven, Claus Thustrup Kreiner, Emmanuel Saez. aCambridge, Mass.bNational Bureau of Economic Researchc2006.1 aNBER working paper seriesvno. w12685 aNovember 2006.3 aThis paper analyzes the optimal income tax treatment of couples. Each couple is modelled as a single rational economic agent supplying labor along two dimensions: primary and secondary earnings. We consider fully general joint income tax systems. Separate taxation is never optimal if social welfare depends on total couple incomes. In a model where secondary earners make only a binary work decision (work or not work), we demonstrate that the marginal tax rate of the primary earner is lower when the spouse works. As a result, the tax distortion on the secondary earner decreases with the earnings of the primary earner and actually vanishes to zero asymptotically. Such negative jointness is optimal because redistribution from two-earner toward one-earner couples is more valuable when primary earner income is lower. We also consider a model where both spouses display intensive labor supply responses. In that context, we show that, starting from the optimal separable tax schedules, introducing some negative jointness is always desirable. Numerical simulations suggest that, in that model, it is also optimal for the marginal tax rate on one earner to decrease with the earnings of his/her spouse. We argue that many actual redistribution systems, featuring family-based transfers combined with individually-based taxes, generate schedules with negative jointness. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aH21 - Efficiency • Optimal Taxation2Journal of Economic Literature class.1 aKreiner, Claus Thustrup.1 aSaez, Emmanuel.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w12685.4 uhttp://www.nber.org/papers/w1268541uhttp://dx.doi.org/10.3386/w12685